Is a Sea Change Coming in the Server Market?

Structure--Barry Evans--Calxeda

Calxeda CEO Barry Evans provides the first public display of the ARM servers the company is developing.

Is the growing influence of huge cloud data centers driving a "sea change" in server design and processor technology? Or will x86 offerings from Intel and AMD continue to dominate, despite the current excitement about new architectures and custom server design?

Four companies debated the future of the server and processor market last week at Structure 2011, including executives from AMD and three newer players in the server game - SeaMicro, Tilera and Calxeda. All agreed that huge purchases by cloud computing providers are changing the server market.

"Our projections indicate that while the server market as a whole will grow, a significant part of that will come from cloud," said Don Newell, the Chief Technology Officer, Servers at chipmaker AMD. "The technology and platform requirements differ pretty dramatically (from enterprise customers). Part of our task is to understand the breadth of that."

Mega-Data Centers Matter
"The mega-data center guys are becoming so important so quickly," said Andrew Feldman, CEO of Sea Micro, which makes many-core servers using the Intel Atom processor. "These people are driving the market. Their data centers may not look like yours. But in four or five years, that's the way you will be building your data centers."

For the largest data center operators, the status quo has not been good enough. Both Google and Facebook are building their own custom servers, working with original design manufacturers (ODMs) rather than buying direct from mainstream server vendors.

That's the target market for Tilera, which just announced a new generation of chips with up to 100 cores. Tilera has focused on these huge cloud customers, and envisions that many of its customer servers will be built by ODMs like Quanta Computer, which built Facebook's servers.

"That's one of the main ways forward," said Tilera CEO Omid Tahernia. "It's a sign that a change is in place is when the supply-chain shifts.

"We're currently at a point where legacy is not a good thing," Tahernia added. "The disruption is here. We are at a point where the dam is going to break. It's not going to fall in one fell swoop. But 5 to 10 years from now, will have a very different conversation."

Lower Energy Use a Selling Point
Next-generation server and chip makers hope to win the hearts and minds of cloud providers by slashing their energy bills. Tilera, Sea Micro and Calxeda all promise substantial power savings over current offerings from Intel and AMD.

"What we see today is that people have a big problem: they have no space and power available," said Barry Evans, CEO of Calxeda, which is developing servers based on the low-power ARM chips, which like Atom are used in many mobile devices. "What we hear is that they have budget and want to buy servers, but they don't have space or power. The current technology just can't take it. This notion of 'let's keep doing it the way we're doing it' doesn't work anymore."

Show and Tell at Structure
Calxeda has yet to launch production hardware, but at Structure Evans showed off a small motherboard for a Calxeda server. SeaMicro's Feldman also displayed one of his company's motherboards, prompting Evans to note that it was bigger than the Calxeda board.

"It's bigger, but it's here, and it's available and you can buy it now," said Feldman.

SeaMicro’s server architecture combines low-power CPUs, compact motherboards and an interconnection and switching fabric. This approach allows it to pack 512 Atom CPUs into a 10U form factor chassis. SeaMicro's servers can use any type of chip, Feldman says, but its research  found Atom to be the right place to start.

"What we found is that the Atom architecture is best equipped for Internet workloads," said Feldman. "It was x86, which allowed us to benefit from existing infrastructure. Intel made some modifications for us and we're now running 64-bit atom chips. We don't have a religious view. Our customers are asking for x86."

That raises the prospect that someday several of the next-generation players might work together.

"We see SeaMicro as a potential customer," said Tilera's Tahernia.

Skepticism from AMD
AMD's Newell acknowledged the market interest in his new rivals, but compared it to previous enthusiasms about Java offload engines. "There were people running around saying 'there is a sea change,' " said Newell. "I'm skeptical that's going to be anything more than nibbling around the edges. The argument for smaller, less powerful cores depends upon having a larger number of processors to deliver the same performance."

Newell said that AMD customers can expect a "substantially more aggressive push to take advantage of the level of scale these cloud providers are building out. We're certainly looking at that and trying to understand how we make servers cheaper and data centers more efficient."

He also asserted that AMD can adapt if the market shifts to the new many-core competitors. "There's nothing magic about the architecture that we can't do," he said.

"Then why didn't you do it?" Feldman asked. Earlier in the panel, Feldman said that "the server guys haven't put in any value for a long time. SeaMicro is a reaction to that."

Newell said the talk of a server sea change was premature. "It's interesting to hear people talk about x86 as though it's a thing of the past," he said. "Anyone who thinks x86 will not dominate is confused."